How Your Credit Score Affects Your Interest Rate
When you have a high credit score, this tells companies that see it that you have a good payment history and are likely to pay things on time. This is because your rating represents the info on your credit report. Companies want to have customers that have good payment histories because it means it’s less risky to do business with them—the risk being that people won’t make their payment on time, or at all, which costs them money. To try and draw in this desired customer base, they offer people with the best credit scores the lowest interest rates, while people with lower ratings pay higher rates.
